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PETITIONER: BIJAY COTTON MILLS LTD.

       Vs.

RESPONDENT: THE STATE OF AJMER.

DATE OF JUDGMENT: 14/10/1954

BENCH: MUKHERJEA, B.K. BENCH: MUKHERJEA, B.K. AIYYAR, T.L. VENKATARAMA MAHAJAN, MEHAR CHAND (CJ) BOSE, VIVIAN JAGANNADHADAS, B.

CITATION:  1955 AIR   33            1955 SCR  (1) 752  CITATOR INFO :  R          1958 SC 328  (11)  D          1960 SC 692  (7)  R          1960 SC 923  (25)  RF         1961 SC 977  (29)  F          1962 SC  12  (11)  R          1963 SC 806  (3)  E          1963 SC1811  (104)  RF         1967 SC 691  (66)  RF         1969 SC 182  (8)  R          1970 SC2042  (10)

ACT:      Constitution  of India, Arts.  19(1)(g),  19(6)-Minimum Wages   Act  (XI  of  1948),  ss.  3,4   and   5-Appropriate Government-Fixing  minimum  rate  of  wages-Whether  offends fundamental rights guaranteed under Art. 19(1)(g).

HEADNOTE:      The  provisions of ss. 3, 4 and 5 of the Minimum  Wages Act  (XI of 1948) empower the appropriate Government to  fix the  minimum rate of wages in an industrial dispute  between the  employer and the employed and it is a criminal  offence not to pay the wages thus fixed under the Act.      Held, that the restrictions imposed upon the freedom of contract  by the fixation of minimum rates of  wages  though they  interfere to some extent with the freedom of trade  or business guaranteed under Art. 19(1)(g) of the  Constitution are  not unreasonable and being imposed in the  interest  of general  public  and  with a view to carry out  one  of  the Directive Principles of State Policy as embodied in Art.  43 of the Constitution are protected by the terms of el. (6) of Art. 19. S.   1.  Est. etc. v. The State of Madras, (1954)  1  M.L.J. 518 referred to.

JUDGMENT:    ORIGINAL  JURISDICTION:  Petitions Nos. 188  and  189  of

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1954.      Under  article 32 of the Constitution of India for  the enforcement of Fundamental Rights.     H.    M.  Seervai, J. B. Dadgchanji and Rajinder  Narain for petitioners.     C.    K.  Daphtary,  Solicitor-General for  India  (M.M. Kaul and P. G. Gokhale, with him) for respondent.     1954.   October  14.   The Judgment  of  the  Court  was delivered by       MUKHERJEA   J.-We  now  take  up  the  two   connected petitions  under article 32 of the Constitution.  In one  of these petitions, to wit Petition No. 188, Shri Bijay  Cotton Mills Ltd. (hereinafter called ’the company’), the appellant in Civil Appeal No. 139 of 1954, figures as the  petitioner, while the other petition, to wit, 755 Petition  No.  189, has been filed by a number  of  employee working  under  it.  To appreciate the  contentions  of  Mr. Seervai, who appears in support of both these petitions,  it will be necessary to narrate a few antecedent facts :     It appears that sometime in 1950 there was an industrial dispute  between  the company and  its  labourers  regarding enhancement  of  wages and the dispute was referred  by  the Government  of  Ajmer  to  an.  Industrial  Tribunal,  by  a notification  dated  the 1st December, 1950.   The  tribunal made  its award on the 27th November, 195 1, and  held  that "the  present  earning capacity of the  mill  precludes  the award   of  higher  rates  of  wages  and  higher   dearness allowance." The employees took an appeal against this  award to  the Appellate Tribunal.  While this appeal was  pending, the  Chief Commissioner, Ajmer, took steps for the  fixation of minimum wages of labourers in the textile industry within the State, under the provisions of the Minimum Wages Act.  A committee  was  formed, as has already been stated,  on  the 17th of January, 1952, which submitted its report on the 4th of  October, following and on the 7th of October, 1952,  the notification  was issued fixing the minimum rates of  wages, against  which writ petitions were filed by several  textile companies including the petitioner company.  In the meantime however  the  appeal filed by the labourers of  the  company proceeded, in the usual way, before the Appellate  Tribunal. The Appellate Tribunal sent the case back to the  Industrial Tribunal  for further investigation and the latter made  its final  award  on  the 8th of September, 1953,  by  which  it rejected  the basis upon which minimum wages of Rs. 56  were fixed by the Chief Commissioner and fixed the minimum  wages including  the  dearness  allowance at  Rs.  35  only.   The company states in its petition that the minimum wages  fixed by  the State Government of Ajmer is altogether  prohibitory and  it is not at all possible for the company to  carry  on its  business  on payment of such  wages.   Accordingly  the company  closed its mills on and from the 1st  April,  1953. There were about 1500 labourers working in the mills of  the company and since January, 1954, several hundreds of 754 them,  it is said, approached the managing  authorities  and requested   them   to  open  the  mills   expressing   their willingness  to  work  at Rs. 35 as wages as  fixed  by  the Industrial  Tribunal.  Though the majority of  workers  were agreeable  to  work  on the wages fixed  by  the  Industrial Tribunal, the company is unable to open the mills by  reason of  the fact that the Minimum Wages Act makes it a  criminal offence  not  to pay the wages fixed under  the  Act.   This being  the position and as the Minimum Wages Act  stands  in the way of the company’s carrying on its business, on  terms

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agreed  to between itself and its workers, Petition No.  188 of  1954  has  been filed by  the  company  challenging  the constitutional  validity of the material provisions  of  the Minimum  Wages Act itself.  The workmen who are  willing  to work  at  less  than the minimum wages fixed  by  the  State Government have filed the other petition supporting all  the allegations  of the company.  Mr. Seervai, who  appears-  in support of both these petitions, has invited us to hold that the material provisions of the Minimum Wages Act are illegal and  ultra  vires by reason of their  conflicting  with  the fundamental  rights  of  the  employers  and  the   employed guaranteed  under article 19(1) (g) of the Constitution  and that they are not protected by clause (6) of that article.       It  is  contended  by the  learned  counsel  that  the Minimum  Wages Act puts unreasonable restrictions  upon  the rights  of  the employer in the sense that he  is  prevented from carrying on trade or business unless he is prepared  to pay  minimum  wages.  The rights of the employees  are  also restricted,  inasmuch as they are -disabled from working  in any  trade or industry on the terms agreed to  between  them and their employers.  It is pointed out that the  provisions relating  to the fixation of minimum wages are  unreasonable and  arbitrary.   The  whole  thing has  been  left  to  the unfettered  discretion of the "appropriate  Government"  and even when a committee is appointed, the report or advice  of such  committee  is  not binding  on  the  Government.   The decision  of  the  committee is final and  is  not  open  to further  review  or  challenge in any  Court  of  law.   The learned  counsel further says that the restrictions  put  by the Act are altogether unreasonable 755 and  even oppressive with regard to one class of  employers, who  for  purely economic reasons are not able  to  pay  the minimum wages but who have no intention to exploit labour at all.   In  such  cases the provisions of  the  Act  have  no reasonable relation to the object which it has in view.   We will examine these contentions in their proper order.      It  can  scarcely be disputed that securing  of  living wages  to  labourers  which ensure not  only  bare  physical subsistence but also the maintenance of health and  decency, is conducive to the general interest of the public.  This is one of the Directive Principles of State Policy embodied  in article  43 of our Constitution.  It is well known  that  in 1928  there was a Minimum Wages Fixing Machinery  Convention held at Geneva and the resolutions passed in that convention were embodied in the International Labour Code.  The Minimum Wages  Act is said to have been passed with a view  to  give effect  to these resolutions (vide S. I. Est., etc.  v.  The State of Madras)(1).  If the labourers are to be secured  in the enjoyment of minimum wages and they are to be  protected against  exploitation by their employers, it  is  absolutely necessary  that  restraints  should be  imposed  upon  their freedom  of  contract and such restrictions  cannot  in  any sense  be said to be unreasonable.  On the other  hand,  the employers cannot be heard to complain if they are  compelled to  pay  minimum wages to their labourers  even  though  the labourers, on account of their poverty and helplessness, are willing to work on lesser wages.     We  could  not  really appreciate the  argument  of  Mr. Seervai  that the provisions of the Act are bound to  affect harshly   and  even  oppressively  a  particular  class   of employers who for purely economic reasons are unable to ’pay the  minimum  wages  fixed  by  the  authorities  but   have absolutely  no  dishonest  intention  of  exploiting   their labourers.   If it is in the interest of the general  public

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that the labourers should be secured adequate living  wages, the  intentions  of the employers whether good  or  bad  are really  irrelevant.   Individual  employers  might  find  it difficult  to  carry  on the business on the  basis  of  the minimum wages fixed under the (1)  (1954) 1 M.L.J. 5i8,521. 756 Act but this must be due entirely to the economic conditions of these particular employers.  That cannot be a reason  for the striking’ down the law itself as unreasonable.     As  regards  the  procedure for the  fixing  of  minimum wages,  the  "appropriate Government" has  undoubtedly  been given   very  large  powers.   But  it  has  to  take   into consideration,  before  fixing  wages,  the  advice  of  the committee if one is appointed, or the representations on his proposals  made  by persons who are likely  to  be  affected thereby.   Consultation with advisory bodies has  been  made obligatory  on all occasions of revision of  minimum  wages, and  section 8 of the Act provides for the appointment of  a Central  Advisory  Board  for the purpose  of  advising  the Central  as well as the State Government both in the  matter of  fixing  and  revision of minimum  wages.   Such  Central Advisory  body  is to act also as a coordinating  agent  for coordinating the work of the different advisory bodies.   In the committees or the advisory bodies the employers and  the employees have an equal number of representatives and  there are  certain  independent  members  besides  them  who   are expected  to take a fair and impartial view of  the  matter. These  provisions  in our opinion,  constitute  an  adequate safeguard  against any hasty or capricious decision  by  the "appropriate Government." In suitable cases the "appropriate Government"  has  also  been given  the  power  of  granting exemptions from the operation of the provisions of this Act. There  is no provision undoubtedly for a further  review  of the decision of the "appropriate Government", but we do  not think  that by itself would make the provisions of  the  Act unreasonable.  In our opinion, the restrictions, though they interfere  to  some  extent with the  freedom  of  trade  or business   guaranteed  under  article  19(1)  (g)   of   the Constitution,  are  reasonable  and  being  imposed  in  the interest of the general public are protected by the terms of clause (6) of article 19.  The result is that the  petitions are dismissed.  We make no order as to costs.                       Petitions dismissed. 757